Fine Print: Some consumer protections for gift card recipients

Monday

Nov 30, 2009 at 12:01 AMNov 30, 2009 at 6:07 AM

Gift cards will be hot items again this year for Christmas shoppers. The cards may seem simple enough, but they are regulated in Massachusetts by a complex series of consumer protection rules. Here's a quick rundown of things to remember about those rules this holiday season, courtesy of Attorney General Martha Coakley's office.

Staff reports

Gift cards will be hot items again this year for Christmas shoppers. The cards may seem simple enough, but they are regulated in Massachusetts by a complex series of consumer protection rules. Here's a quick rundown of things to remember about those rules this holiday season, courtesy of Attorney General Martha Coakley's office.

- State law requires gift certificates and gift cards to be redeemable for up to seven years after they are issued. The issuance and expiration dates must be printed on the face of a gift certificate. Electronic cards with dollar values on them need to be sold with a printed sales receipt that includes those dates. If no dates are provided, the gift certificate or gift card is good indefinitely.

- Once a consumer redeems a gift certificate or gift card for 90 percent of its value, the balance is redeemable in cash. For certificates or cards that allow their holders to add value at a later date, the holders can choose to get cash for those cards when the remaining value is $5 or less.

- One important exception: State law doesn't apply to gift cards issued by a national bank - even if these cards are labeled by a company other than the bank (such as a shopping mall gift card issued in conjunction with a national bank). These cards can have fees attached to them that diminish their value over time, such as monthly “maintenance'' fees or “dormancy'' fees that kick in if a card isn't used for a certain period of time. These fees must be disclosed at the time of purchase.

- Retailers that are going out of business will sometimes - but not all the time - reimburse you for the value of a gift certificate or gift card. If a retailer files for bankruptcy protection, you may need to file a document known as a “proof of claim'' with the court.

- Many retailers that file for Chapter 11 bankruptcy reorganization ask a judge for the ability to honor gift certificates, avoiding the need to require consumers to file claims with the court.

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